Written by Marijn Overvest | Reviewed by Sjoed Goedhart | Fact Checked by Ruud Emonds | Our editorial policy
Sustainable Business — Everything You Should Know
As taught in the Sustainable Procurement Course / ★★★★★ 4.9 rating
Key take-aways
- Sustainable business means operating in a way that lessens negative impacts on the environment, society, and the economy.
- Businesses face unpredictable challenges such as climate change and resource depletion.
- To create a sustainable business strategy, know the problem, define objectives and mission, and align strategies with sustainability before implementation.
Sustainable business is embraced by many big companies as consumers are more concerned about the ethical standards of companies in making and operating their business. However, what is a sustainable business?
For this article, we will discuss what sustainable business is. We will tackle its importance and tell you how you can create your sustainable business strategy. Additionally, we will show you companies that have sustainability initiatives.
Once you are done reading this article, you will know the significance of why many companies embrace sustainability. Thus, this will allow you to be inspired by their sustainability initiatives that you can adopt in your company.
The Meaningof Sustainability in Business
Today, many professionals in different industries often use the word sustainability. However, what is it? In business, sustainability refers to how a business operates without negatively impacting the environment, society, and the economy.
Business sustainability, also known as corporate sustainability, is the coordination and management of environmental, social, and economic demands and concerns ensuring ethical, responsible, and ongoing success.
The sustainability practices of businesses are usually assessed against the environmental, social, and governance metrics. Investments in socially ethical practices may initially cost money. However, it will lead to improved recruitment, public relations, branding, and increased profitability.
As we face many challenges in the world, including the COVID-19 pandemic, the threat of climate change has become too risky to ignore. Right now, many businesses are seeing both pressure and opportunity in establishing their sustainability goals.
The Importance of Sustainability in Business
We are living in an unpredictable world. Dwindling natural resources, climate change, and increasing demands on energy and food supply are disrupting business operations and supply chains in various ways many professionals do not expect.
Therefore, private and public organizations need to rethink the way they function. Transforming into a successful sustainable business requires new levels of agility and resilience that are rooted in sustainable practices that preserve the planet.
For us to protect the planet and future generations, companies need to drive decarbonization, comply with environmental regulatory requirements, and improve resource consumption. Those businesses paving the way in sustainability initiatives and practices are embracing new business models to increase brand loyalty, uncover new opportunities to decrease costs, and ultimately win customers.
Creating a Sustainable Business Strategy
If you want to know how to create a sustainable business strategy then look no further than the list below!
1. Know the problem and define your objectives
The first step to driving change within your company is to know what sustainability means in your company. Consider the problems each person in your company thinks about sustainability as a priority.
To guide you in this process, you may ask yourself these questions:
- What is our company culture? Is it struggling?
- How much waste does my organization produce?
- Are our hiring processes attracting diverse job candidates?
- Is our product targeted to help a certain group or audience?
- What is the impact of our business operation in the surrounding community?
2. Define your company’s mission
Once you have defined your company’s objective, you are now ready to define your company’s mission. Having a unique mission statement is a significant part of becoming a sustainable business.
An effective mission statement outlines the focus of your company. It should include your organization’s purpose and values. Additionally, it must serve as a guide on why you are initiating sustainability in your company.
3. Align your Strategy with sustainability
Companies should know that contrary to traditional ways of thinking, sustainability is not at odds with profits or competitive advantages. Sustainability is essential if you want to stay longer in the industry.
Businesses should strive to exceed compliance and use sustainability to their advantage against other businesses.
4. Implement and assess the results of your strategy
For you to be able to know if your strategy is effective, you must implement it in the process of your company. As your mission and strategy are solidified, you have a higher chance of implementing them successfully.
Additionally, You should assess your process periodically to ensure that your sustainability business objectives, missions, and progress remain aligned with one another.
Examples of Sustainability Initiatives of Companies
It’s always admirable to lead by example and this is exactly what these companies have done in the world of sustainability initiatives.
1. Orsted
Orsted, a Danish state-owned energy company, revolutionized the power industry with its goal to reduce the effects of climate change.
It has discontinued its investment in coal-powered plants and reinvested into wind farms and is now the largest offshore wind farm developer in the world.
Orsted has achieved its goal of sustainability by encouraging its supply chain ecosystem to align. Thus reducing carbon emissions and achieving its net zero goals.
2. Unilever and Nestle
Unilever and Nestle both made major commitments to sustainability initiatives. Unilever is aiming to achieve net-zero emissions from its goods by 2039 and its supply chain be free from deforestation by 2023.
On the other hand, Nestle is targeting to achieve net-zero greenhouse gas emissions by 2050 and have 100% sustainable packaging by 2025.
3. Apple
Apple is known for its high-tech launch spectacles and factories in China. It has committed to mitigating the effect of climate change in some of the hardest hit areas.
Apple is working with Conservation International, pledging to replant 27,000 mangrove trees along the coastline in Colombia. The mangrove trees are used to filter the carbon from the atmosphere and protect the coastlines from erosion.
Additionally, it has initiated to run on 100% green energy at its production facilities that rely on wind and solar power instead of the traditional source of energy which is fossil fuels.
4. Google
In September 2020, Google made one of its most ambitious environmental commitments which is to run its operation purely on carbon-free energy by 2030.
Additionally, it has announced that it purchased enough carbon offsets to completely cancel out all the planet-heating carbon emissions the company has released since its establishment in 1998.
Conclusion
This comprehensive article delves into the concept of sustainable business, exploring its meaning, importance, and strategies for implementation. It emphasizes the growing trend of companies embracing sustainability, driven by consumer concerns about ethical standards.
The article underscores the significance of sustainability in mitigating challenges like climate change, resource depletion, and disruptions to supply chains. Readers gain insights into creating a sustainable business strategy, aligning with sustainability, and assessing its effectiveness.
Noteworthy examples of sustainability initiatives by companies like Orsted, Unilever, Nestle, Apple, and Google serve as inspiration for integrating sustainability into business practices.
Frequentlyasked questions
What is sustainability in business?
Sustainability in businesses is the coordination and management of environmental, social, and economic demands and concerns ensuring ethical, responsible, and ongoing success.
What is the importance of sustainability today?
Sustainability allows companies to take responsibility for how their operation affects the environment and society. Therefore, It is important to protect the environment and the well-being of their workforce and their surrounding community.
Why are many companies switching to sustainability nowadays?
Many companies are switching to sustainability as they are pressured by customers, investors, and the government to be accountable for how they can impact the environment and the people through their operations.
About the author
My name is Marijn Overvest, I’m the founder of Procurement Tactics. I have a deep passion for procurement, and I’ve upskilled over 200 procurement teams from all over the world. When I’m not working, I love running and cycling.
